Texas 2011 - 82nd Regular

Texas House Bill HB2559 Compare Versions

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1	1	By: Truitt (Senate Sponsor - Harris) H.B. No. 2559
2	2	(In the Senate - Received from the House April 20, 2011;
3	3	April 26, 2011, read first time and referred to Committee on
4	4	Business and Commerce; May 3, 2011, reported favorably by the
5	5	following vote: Yeas 8, Nays 0; May 3, 2011, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to commercial motor vehicle installment sales.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 14.107(b), Finance Code, is amended to
13	13	read as follows:
14	14	(b) The finance commission by rule shall set the fees for
15	15	licensing and examination, as applicable, under Chapter 342, 347,
16	16	348, 351, 353, or 371 at amounts or rates necessary to recover the
17	17	costs of administering those chapters. The rules may provide that
18	18	the amount of a fee charged to a license holder is based on the
19	19	volume of the license holder's regulated business and other key
20	20	factors. The commissioner may provide for collection of a single
21	21	annual fee from a person licensed under Chapter 342, 347, 348, 351,
22	22	or 371 to include amounts due for both licensing and examination.
23	23	SECTION 2. Sections 303.001(b) and (c), Finance Code, are
24	24	amended to read as follows:
25	25	(b) A contract that is subject to Chapter 342, 345, 347,
26	26	[or] 348, or 353, including a contract for an open-end account, may,
27	27	as an alternative to an interest rate or amount of time price
28	28	differential allowed under that chapter, provide for a simple or
29	29	precomputed rate or amount of time price differential that does not
30	30	exceed the applicable ceiling provided by this chapter or by the
31	31	equivalent yield authorized by Chapter 342, 345, 347, [or] 348, or
32	32	353.
33	33	(c) Except as inconsistent with this chapter, a party to a
34	34	contract that is subject to Chapter 342, 345, 347, [or] 348, or 353,
35	35	or the party's assignee, has all rights, duties, and obligations
36	36	under the applicable chapter, including those relating to refund
37	37	credits on prepayment or acceleration.
38	38	SECTION 3. Section 303.002, Finance Code, is amended to
39	39	read as follows:
40	40	Sec. 303.002. WEEKLY CEILING. The parties to a written
41	41	agreement may agree to an interest rate, or in an agreement
42	42	described by Chapter 345, 347, [or] 348, or 353, an amount of time
43	43	price differential producing a rate, that does not exceed the
44	44	applicable weekly ceiling.
45	45	SECTION 4. Section 303.402(a), Finance Code, is amended to
46	46	read as follows:
47	47	(a) A person who contracts for, charges, or receives under a
48	48	contract subject to Chapter 342, 345, 346, 347, [or] 348, or 353,
49	49	including a contract for an open-end account, a rate or amount of
50	50	time price differential that exceeds the maximum applicable rate or
51	51	amount authorized by the applicable chapter or this chapter is
52	52	subject to a penalty for that violation determined under Chapter
53	53	349.
54	54	SECTION 5. Section 307.051(f), Finance Code, is amended to
55	55	read as follows:
56	56	(f) Collateral protection insurance does not include
57	57	insurance coverage that:
58	58	(1) is purchased by the creditor for which the debtor
59	59	is not charged;
60	60	(2) is purchased at the inception of a credit
61	61	transaction in which the debtor is a party or to which the debtor
62	62	agrees, whether or not costs are included in a payment plan under
63	63	the credit transaction;
64	64	(3) is maintained by the creditor for the protection
65	65	of collateral that comes into the possession or control of the
66	66	creditor through foreclosure, repossession, or a similar event;
67	67	(4) is credit insurance, mortgage protection
68	68	insurance, insurance issued to cover the life or health of the
69	69	debtor, or any other insurance maintained to cover the inability or
70	70	failure of the debtor to make payment under the credit agreement;
71	71	(5) is title insurance;
72	72	(6) is flood insurance required to be placed by
73	73	creditors under Section 102, National Flood Insurance Act of 1968
74	74	(42 U.S.C. Section 4012a); or
75	75	(7) is insurance on a commercial vehicle securing a
76	76	retail installment contract under Chapter 353 [348].
77	77	SECTION 6. Section 341.502(a), Finance Code, is amended to
78	78	read as follows:
79	79	(a) A contract for a loan under Chapter 342, a retail
80	80	installment transaction under Chapter 348 [other than a contract
81	81	for a commercial vehicle], or a home equity loan regulated by the
82	82	Office of Consumer Credit Commissioner must be:
83	83	(1) written in plain language designed to be easily
84	84	understood by the average consumer; and
85	85	(2) printed in an easily readable font and type size.
86	86	SECTION 7. Section 348.001(1-a), Finance Code, as added by
87	87	Chapter 238 (S.B. 1965), Acts of the 81st Legislature, Regular
88	88	Session, 2009, and Section 348.001(2), Finance Code, are amended to
89	89	read as follows:
90	90	(1-a) "Commercial vehicle" has the meaning assigned by
91	91	Section 353.001 [means a motor vehicle that is not used primarily
92	92	for personal, family, or household use. The term includes:
93	93	[(A) a motor vehicle with a gross vehicular
94	94	weight of 10,001 pounds or more;
95	95	[(B) a motor vehicle that will be owned by a
96	96	corporation, limited liability company, limited partnership, or
97	97	other business entity formed, organized, or registered in this
98	98	state, another state, or another country; and
99	99	[(C) a motor vehicle that will be part of a fleet
100	100	of five or more vehicles owned by the same person].
101	101	(2) "Heavy commercial vehicle" has the meaning
102	102	assigned by Section 353.001 [means:
103	103	[(A) a truck or truck tractor that:
104	104	[(i) has a gross vehicular weight of 19,000
105	105	pounds or more; and
106	106	[(ii) is not used primarily for personal,
107	107	family, or household use; or
108	108	[(B) a trailer or semitrailer designed for use in
109	109	combination with a vehicle described by Paragraph (A)].
110	110	SECTION 8. Section 348.0015(a), Finance Code, is amended to
111	111	read as follows:
112	112	(a) A motor vehicle that is not described by Section
113	113	353.001(1)(A) [348.001(1-a)(A)], (B), or (C) or a motor vehicle
114	114	that is of a type typically used for personal, family, or household
115	115	use, as determined by finance commission rule, is presumed not to be
116	116	a commercial vehicle.
117	117	SECTION 9. Section 348.006(c), Finance Code, is amended to
118	118	read as follows:
119	119	(c) For a documentary fee to be included in the principal
120	120	balance of a retail installment contract:
121	121	(1) the retail seller must charge the documentary fee
122	122	to cash buyers and credit buyers;
123	123	(2) the documentary fee may not exceed[:
124	124	[(A) for a motor vehicle retail installment
125	125	contract other than a contract for a commercial vehicle,] a
126	126	reasonable amount agreed to by the retail seller and retail buyer
127	127	for the documentary services; [or
128	128	[(B) for a commercial vehicle retail installment
129	129	contract, an amount agreed to in writing by the retail seller and
130	130	retail buyer;] and
131	131	(3) [except for a buyer's order or retail installment
132	132	contract for a commercial vehicle,] the buyer's order and the
133	133	retail installment contract must include:
134	134	(A) a statement of the amount of the documentary
135	135	fee; and
136	136	(B) in reasonable proximity to the place in each
137	137	where the amount of the documentary fee is disclosed, the following
138	138	notice in type that is bold-faced, capitalized, underlined, or
139	139	otherwise conspicuously set out from surrounding written material:
140	140	"A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE
141	141	IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING
142	142	DOCUMENTS RELATING TO THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED A
143	143	REASONABLE AMOUNT AGREED TO BY THE PARTIES. THIS NOTICE IS REQUIRED
144	144	BY LAW."
145	145	SECTION 10. Section 348.007, Finance Code, is amended by
146	146	adding Subsection (d) to read as follows:
147	147	(d) A retail installment transaction in which a retail buyer
148	148	purchases a motor vehicle that is a commercial vehicle is not
149	149	subject to this chapter and is subject to Chapter 353 if the retail
150	150	installment contract states that Chapter 353 applies.
151	151	SECTION 11. Sections 348.104(b) and (c), Finance Code, are
152	152	amended to read as follows:
153	153	(b) The add-on charge is $7.50 per $100 per year on the
154	154	principal balance for a new motor vehicle[, other than a heavy
155	155	commercial vehicle,] designated by the manufacturer by a model year
156	156	that is not earlier than the year in which the sale is made.
157	157	(c) The add-on charge is $10 per $100 per year on the
158	158	principal balance for:
159	159	(1) a new motor vehicle not covered by Subsection (b);
160	160	or
161	161	(2) a used motor vehicle designated by the
162	162	manufacturer by a model year that is not more than two years before
163	163	the year in which the sale is made[; or
164	164	[(3) a new or used heavy commercial vehicle designated
165	165	by the manufacturer by a model year that is not more than two years
166	166	before the year in which the sale is made].
167	167	SECTION 12. Section 348.107(a), Finance Code, is amended to
168	168	read as follows:
169	169	(a) A retail installment contract may provide that if an
170	170	installment remains unpaid after the [10th day after the maturity
171	171	of the installment for a heavy commercial vehicle or after the] 15th
172	172	day after the maturity of the installment [for any other motor
173	173	vehicle] the holder may collect:
174	174	(1) a delinquency charge that does not exceed five
175	175	percent of the amount of the installment; or
176	176	(2) interest on the amount of the installment accruing
177	177	after the maturity of the installment and until the installment is
178	178	paid in full at a rate that does not exceed the maximum rate
179	179	authorized for the contract.
180	180	SECTION 13. Section 348.109, Finance Code, is amended to
181	181	read as follows:
182	182	Sec. 348.109. ACCELERATION OF DEBT MATURITY. A retail
183	183	installment contract may not authorize the holder to accelerate the
184	184	maturity of all or a part of the amount owed under the contract
185	185	unless:
186	186	(1) the retail buyer is in default in the performance
187	187	of any of the buyer's obligations; or
188	188	(2) the holder believes in good faith that the
189	189	prospect of buyer's payment or performance is impaired[; or
190	190	[(3) if the retail installment contract is for a
191	191	commercial vehicle, the retail buyer or an affiliate of the retail
192	192	buyer is in default in its obligations under another financing
193	193	agreement or leasing agreement held by the same holder or an
194	194	affiliate of the holder].
195	195	SECTION 14. Section 348.120(b), Finance Code, is amended to
196	196	read as follows:
197	197	(b) On a contract for a motor vehicle [other than a heavy
198	198	commercial vehicle] the minimum amount of the refund credit is
199	199	computed by:
200	200	(1) subtracting an acquisition cost of $25 from the
201	201	original time price differential; and
202	202	(2) multiplying the amount computed under Subdivision
203	203	(1) by the percentage of refund computed under Subsection (d).
204	204	SECTION 15. Section 348.213(b), Finance Code, is amended to
205	205	read as follows:
206	206	(b) A policy of insurance described by Subsection (a) must
207	207	comply with the applicable requirements of Sections 348.201,
208	208	348.203, [and] 348.208, and[, except if the policy relates to a
209	209	retail installment contract for a commercial vehicle, Section]
210	210	348.209.
211	211	SECTION 16. Section 348.413(b), Finance Code, is amended to
212	212	read as follows:
213	213	(b) The holder may charge for the transfer of equity an
214	214	amount that does not exceed[:
215	215	[(1)] $25 [for a motor vehicle that is not a heavy
216	216	commercial vehicle; or
217	217	[(2) $50 for a heavy commercial vehicle].
218	218	SECTION 17. Subtitle B, Title 4, Finance Code, is amended by
219	219	adding Chapter 353 to read as follows:
220	220	CHAPTER 353. COMMERCIAL MOTOR VEHICLE INSTALLMENT SALES
221	221	SUBCHAPTER A. GENERAL PROVISIONS
222	222	Sec. 353.001. DEFINITIONS. In this chapter:
223	223	(1) "Commercial vehicle" means a motor vehicle that is
224	224	not used primarily for personal, family, or household use. The term
225	225	includes:
226	226	(A) a motor vehicle with a gross vehicular weight
227	227	of 10,001 pounds or more;
228	228	(B) a motor vehicle that will be owned by a
229	229	corporation, limited liability company, limited partnership, or
230	230	other business entity formed, organized, or registered in this
231	231	state, another state, or another country; and
232	232	(C) a motor vehicle that will be part of a fleet
233	233	of five or more vehicles owned by the same person.
234	234	(2) "Debt cancellation agreement" means an agreement
235	235	of the holder of the retail installment contract to waive:
236	236	(A) all or part of the difference between the
237	237	amount owed under a retail installment contract and the amount paid
238	238	under a physical damage insurance policy maintained by the retail
239	239	buyer or its assign, in the event of a total loss or theft of the
240	240	commercial vehicle;
241	241	(B) all or part of the amount owed under the
242	242	retail installment contract, in the event of the death of the retail
243	243	buyer; or
244	244	(C) one or more payments owed under the retail
245	245	installment contract, in the event of the disability of the retail
246	246	buyer.
247	247	(3) "Heavy commercial vehicle" means:
248	248	(A) a commercial vehicle that has a gross
249	249	vehicular weight of 19,000 pounds or more; or
250	250	(B) a trailer or semitrailer designed for use in
251	251	combination with a vehicle described by Paragraph (A).
252	252	(4) "Holder" means a person who is:
253	253	(A) a retail seller; or
254	254	(B) the assignee or transferee of a retail
255	255	installment contract.
256	256	(5) "Motor vehicle" has the meaning assigned by
257	257	Section 348.001.
258	258	(6) "Precomputed earnings method" means a method of
259	259	computing the time price differential in which the time price
260	260	differential is computed at the inception of the contract based on
261	261	the principal balance for the full contract term, as if the
262	262	principal balance under the contract will not decline over the term
263	263	of the contract, and in which the retail buyer agrees to pay the
264	264	total of payments that includes both the principal balance of the
265	265	contract and the time price differential.
266	266	(7) "Retail buyer" means a person who purchases or
267	267	agrees to purchase a commercial vehicle from a retail seller in a
268	268	retail installment transaction.
269	269	(8) "Retail installment contract" means one or more
270	270	instruments entered into in this state that evidence a retail
271	271	installment transaction. The term includes a security agreement and
272	272	a document that evidences a bailment or lease described by Section
273	273	353.003.
274	274	(9) "Retail installment transaction" means a
275	275	transaction in which a retail buyer purchases a commercial vehicle
276	276	from a retail seller other than principally for the purpose of
277	277	resale and agrees with the retail seller to pay part or all of the
278	278	cash price in one or more deferred installments.
279	279	(10) "Retail seller" means a person in the business of
280	280	selling commercial vehicles to retail buyers in retail installment
281	281	transactions.
282	282	(11) "Scheduled installment earnings method" means a
283	283	method of computing the time price differential by applying a daily
284	284	rate to the unpaid principal balance as if each scheduled payment
285	285	will be paid on the payment's scheduled installment date.
286	286	(12) "Time price differential" means the total amount
287	287	added to the principal balance to determine the balance of the
288	288	retail buyer's indebtedness under a retail installment contract.
289	289	(13) "True daily earnings method" means a method of
290	290	computing the time price differential by applying a daily rate to
291	291	the unpaid principal balance based on the actual payment date as
292	292	provided by Section 353.016.
293	293	Sec. 353.002. PRESUMPTION REGARDING NONCOMMERCIAL
294	294	VEHICLES; EXCEPTION. (a) A motor vehicle that is not described by
295	295	Section 353.001(1)(A), (B), or (C) or a motor vehicle that is of a
296	296	type typically used for personal, family, or household use, as
297	297	determined by finance commission rule, is presumed not to be a
298	298	commercial vehicle.
299	299	(b) Notwithstanding Subsection (a), if a retail buyer
300	300	represents in writing that a motor vehicle is not for personal,
301	301	family, or household use, or that the vehicle is for commercial use,
302	302	a retail seller or holder may rely on that representation unless the
303	303	retail seller or holder, as applicable, has actual knowledge that
304	304	the representation is not true.
305	305	Sec. 353.003. BAILMENT OR LEASE AS RETAIL INSTALLMENT
306	306	TRANSACTION. (a) A bailment or lease of a commercial vehicle is a
307	307	retail installment transaction if the bailee or lessee:
308	308	(1) contracts to pay as compensation for use of the
309	309	vehicle an amount that is substantially equal to or exceeds the
310	310	value of the vehicle; and
311	311	(2) on full compliance with the bailment or lease is
312	312	bound to become the owner or, for no or nominal additional
313	313	consideration, has the option to become the owner of the vehicle.
314	314	(b) An agreement for the lease of a commercial vehicle does
315	315	not create a retail installment transaction by merely providing
316	316	that the rental price is permitted or required to be adjusted under
317	317	the agreement as determined by the amount realized on the sale or
318	318	other disposition of the vehicle, as provided by Section 501.112,
319	319	Transportation Code.
320	320	Sec. 353.004. CLASSIFICATION AS RETAIL INSTALLMENT
321	321	TRANSACTION UNAFFECTED. A transaction is not excluded as a retail
322	322	installment transaction because:
323	323	(1) the retail seller arranges to transfer the retail
324	324	buyer's obligation;
325	325	(2) the amount of any charge in the transaction is
326	326	determined by reference to a chart or other information furnished
327	327	by a financing institution;
328	328	(3) a form for all or part of the retail installment
329	329	contract is furnished by a financing institution; or
330	330	(4) the credit standing of the retail buyer is
331	331	evaluated by a financing institution.
332	332	Sec. 353.005. CASH PRICE. (a) The cash price is the price
333	333	at which the retail seller offers in the ordinary course of business
334	334	to sell for cash the goods or services that are subject to the
335	335	transaction. An advertised price does not necessarily establish a
336	336	cash price.
337	337	(b) The cash price does not include any finance charge.
338	338	(c) At the retail seller's option, the cash price may
339	339	include:
340	340	(1) the price of accessories;
341	341	(2) the price of services related to the sale;
342	342	(3) the price of service contracts;
343	343	(4) taxes; and
344	344	(5) fees for license, title, and registration.
345	345	Sec. 353.006. ITEMIZED CHARGE. An amount in a retail
346	346	installment contract is an itemized charge if the amount is not
347	347	included in the cash price and is the amount of:
348	348	(1) fees for registration, certificate of title, and
349	349	license and any additional registration fees charged by a full
350	350	service deputy under Section 502.114, Transportation Code;
351	351	(2) any taxes;
352	352	(3) fees or charges prescribed by law and connected
353	353	with the sale or inspection of the commercial vehicle;
354	354	(4) charges authorized for insurance, service
355	355	contracts, and warranties by Subchapter C; and
356	356	(5) advances or payments authorized under Section
357	357	353.402(b) or (c) made by the retail seller to or for the benefit of
358	358	the retail buyer.
359	359	Sec. 353.007. ADDITIONAL CHARGES PERMITTED. (a) In
360	360	addition to the amounts allowed under Sections 353.005 and 353.006,
361	361	the following amounts may be included as an itemized charge or in
362	362	the cash price in a retail installment contract for a commercial
363	363	vehicle:
364	364	(1) any fees prescribed by law;
365	365	(2) any amounts charged by a titling or registration
366	366	service relating to the sale;
367	367	(3) any other amount agreed to by the retail buyer and
368	368	retail seller, including amounts payable to the retail seller or
369	369	another person for the provision of goods or services relating to:
370	370	(A) the commercial vehicle;
371	371	(B) the sale or use of the commercial vehicle; or
372	372	(C) the retail buyer's business in which the
373	373	commercial vehicle will be used; and
374	374	(4) an amount paid to the retail seller or other person
375	375	as consideration for a debt cancellation agreement.
376	376	(b) If a charge for a debt cancellation agreement is
377	377	included in the contract, the contract and debt cancellation
378	378	agreement must each conspicuously disclose that the debt
379	379	cancellation agreement is optional.
380	380	(c) Notwithstanding any other law, a charge for a debt
381	381	cancellation agreement is not a charge for insurance, and the sale,
382	382	provision, or waiving of a balance owed or other action relating to
383	383	a debt cancellation agreement is not considered insurance or
384	384	engaging in the business of insurance.
385	385	Sec. 353.008. PRINCIPAL BALANCE; INCLUSION OF DOCUMENTARY
386	386	FEE. (a) The principal balance under a retail installment contract
387	387	is computed by:
388	388	(1) adding:
389	389	(A) the cash price of the commercial vehicle;
390	390	(B) each amount included in the retail
391	391	installment contract for an itemized charge; and
392	392	(C) subject to Subsection (c), a documentary fee
393	393	for services rendered for or on behalf of the retail buyer in
394	394	handling and processing documents relating to the sale of the
395	395	commercial vehicle; and
396	396	(2) subtracting from the results under Subdivision (1)
397	397	the amount of the retail buyer's down payment in money, goods, or
398	398	both.
399	399	(b) The computation of the principal balance may include an
400	400	amount authorized under Section 353.402(b).
401	401	(c) For a documentary fee to be included in the principal
402	402	balance of a retail installment contract:
403	403	(1) the retail seller must charge the documentary fee
404	404	to cash buyers and credit buyers; and
405	405	(2) the documentary fee may not exceed an amount
406	406	agreed to in writing by the retail seller and retail buyer.
407	407	Sec. 353.009. APPLICABILITY OF CHAPTER. (a) Except as
408	408	provided by this section, this chapter applies to a retail
409	409	installment transaction for a commercial vehicle if the retail
410	410	installment contract states that this chapter applies.
411	411	(b) If a retail installment contract does not state that
412	412	this chapter applies, the transaction is governed by Chapter 348,
413	413	and this chapter does not apply.
414	414	(c) This chapter does not affect or apply to a loan made or
415	415	the business of making loans under other law of this state and does
416	416	not affect a rule of law applicable to a retail installment sale
417	417	that is not a retail installment transaction.
418	418	(d) The provisions of this chapter defining specific rates
419	419	and amounts of charges and requiring certain credit disclosures to
420	420	be made control over any contrary law of this state respecting those
421	421	subjects.
422	422	Sec. 353.010. APPLICABILITY OF OTHER STATUTES TO RETAIL
423	423	INSTALLMENT TRANSACTION. (a) A loan or interest statute of this
424	424	state, other than Chapter 303, does not apply to a retail
425	425	installment transaction subject to this chapter.
426	426	(b) Except as provided by this chapter, an applicable
427	427	statute, including Title 1 and Chapter 322, Business & Commerce
428	428	Code, or a principle of common law continues to apply to a retail
429	429	installment transaction unless it is displaced by this chapter.
430	430	Sec. 353.011. FEDERAL DISCLOSURE REQUIREMENTS. If a
431	431	disclosure requirement of this chapter and one of a federal law,
432	432	including a regulation or an interpretation of federal law, are
433	433	inconsistent or conflict, federal law controls and the inconsistent
434	434	or conflicting disclosures required by this chapter need not be
435	435	given.
436	436	Sec. 353.012. ADDITIONAL INFORMATION ALLOWED IN CONTRACT.
437	437	Information not required by this chapter may be included in a retail
438	438	installment contract.
439	439	Sec. 353.013. ORDER OF ITEMS IN CONTRACT. Items required by
440	440	this chapter to be in a retail installment contract are not required
441	441	to be stated in the order set forth in this chapter.
442	442	Sec. 353.014. APPLICABILITY OF INSURANCE PREMIUM FINANCING
443	443	PROVISIONS. Chapter 651, Insurance Code, does not apply to a retail
444	444	installment transaction.
445	445	Sec. 353.015. CONDITIONAL DELIVERY AGREEMENT. (a) In this
446	446	section, "conditional delivery agreement" means a contract between
447	447	a retail seller and prospective retail buyer under the terms of
448	448	which the retail seller allows the prospective retail buyer the use
449	449	and benefit of a commercial vehicle for a specified term.
450	450	(b) A retail seller and prospective retail buyer may enter
451	451	into a conditional delivery agreement.
452	452	(c) A conditional delivery agreement is:
453	453	(1) an enforceable contract; and
454	454	(2) void on the execution of a retail installment
455	455	contract between the parties to the conditional delivery agreement
456	456	for the sale of the commercial vehicle that is the subject of the
457	457	conditional delivery agreement.
458	458	(d) A conditional delivery agreement may only confer rights
459	459	consistent with this section and may not confer any legal or
460	460	equitable rights of ownership, including ownership of the
461	461	commercial vehicle that is the subject of the conditional delivery
462	462	agreement.
463	463	(e) A conditional delivery agreement may not exceed a term
464	464	of 15 days.
465	465	(f) If a prospective retail buyer tenders to a retail seller
466	466	a trade-in motor vehicle in connection with a conditional delivery
467	467	agreement:
468	468	(1) the parties must agree on the value of the trade-in
469	469	motor vehicle;
470	470	(2) the conditional delivery agreement must contain
471	471	the agreed value of the trade-in motor vehicle described by
472	472	Subdivision (1); and
473	473	(3) the retail seller must use reasonable care to
474	474	conserve the trade-in motor vehicle while the vehicle is in the
475	475	retail seller's possession.
476	476	(g) If the parties to a conditional delivery agreement do
477	477	not subsequently enter into a retail installment contract for the
478	478	sale of the commercial vehicle that is the subject of the
479	479	conditional delivery agreement, the retail seller shall, not later
480	480	than the seventh day after termination of the conditional delivery
481	481	agreement:
482	482	(1) deliver to the prospective retail buyer any
483	483	trade-in motor vehicle that the prospective retail buyer tendered
484	484	in connection with the conditional delivery agreement in the same
485	485	or substantially the same condition as it was at the time of
486	486	execution of the agreement and shall return any down payment or
487	487	other consideration received from the prospective retail buyer in
488	488	connection with the agreement; or
489	489	(2) if the trade-in motor vehicle cannot be returned
490	490	in the same or substantially the same condition as it was at the
491	491	time of execution of the conditional delivery agreement, deliver to
492	492	the prospective retail buyer a sum of money equal to the agreed
493	493	value of the trade-in motor vehicle as described by Subsection (f)
494	494	and shall return any down payment or other consideration described
495	495	by Subdivision (1).
496	496	(h) Any money that a retail seller is obligated to provide a
497	497	prospective retail buyer under Subsection (g) must be tendered at
498	498	the same time that the trade-in motor vehicle is delivered for
499	499	return to the prospective retail buyer or when the trade-in motor
500	500	vehicle would have been delivered if the vehicle was damaged or
501	501	could not be returned.
502	502	(i) If a prospective retail buyer returns a commercial
503	503	vehicle under a conditional delivery agreement at the request of
504	504	the retail seller, the retail seller, notwithstanding the period
505	505	prescribed by Subsection (g), must return the trade-in vehicle at
506	506	the same time that the commercial vehicle under the conditional
507	507	delivery agreement is returned by the prospective retail buyer.
508	508	(j) The prospective retail buyer shall return the
509	509	commercial vehicle received under the conditional delivery
510	510	agreement in the same or substantially the same condition as it was
511	511	at the time of the execution of the conditional delivery agreement.
512	512	(k) An amount paid or required to be paid by the retail
513	513	seller under Subsection (g) is subject to review by the
514	514	commissioner. If the commissioner determines that the retail
515	515	seller in fact owes the prospective retail buyer a certain amount
516	516	under Subsection (g), the commissioner may order the retail seller
517	517	to pay the amount to the prospective retail buyer. If the trade-in
518	518	motor vehicle is not returned by the retail seller in accordance
519	519	with this section and the retail seller does not pay the prospective
520	520	retail buyer an amount equal to the agreed value of the trade-in
521	521	motor vehicle within the period prescribed by this section, the
522	522	commissioner may assess an administrative penalty against the
523	523	retail seller in an amount that is reasonable in relation to the
524	524	value of the trade-in motor vehicle. The commissioner shall
525	525	provide notice to the retail seller and the prospective retail
526	526	buyer of the commissioner's determination under this subsection.
527	527	(l) Not later than the 30th day after the date the parties
528	528	receive notice of the commissioner's determination under
529	529	Subsection (k), the retail seller or prospective retail buyer may
530	530	file with the commissioner an appeal of the commissioner's
531	531	determination requesting a time and place for a hearing before a
532	532	hearings officer designated by the commissioner. A hearing under
533	533	this subsection is governed by Chapter 2001, Government Code.
534	534	After the hearing, based on the findings of fact, conclusions of
535	535	law, and recommendations of the hearings officer, the commissioner
536	536	shall enter a final order.
537	537	(m) A person who files an appeal under Subsection (l) is
538	538	required to pay a deposit to secure the payment of the costs of the
539	539	hearing in a reasonable amount as determined by the commissioner,
540	540	unless the person cannot afford to pay the deposit and files an
541	541	affidavit to that effect with the hearings officer in the form and
542	542	content prescribed by finance commission rule. The entire deposit
543	543	must be refunded to the person if the person prevails at the
544	544	hearing. If the person does not prevail, any portion of the deposit
545	545	in excess of the costs of the hearing assessed against the person is
546	546	refundable.
547	547	(n) Notice of the commissioner's final order under
548	548	Subsection (l), given to the person in accordance with Chapter
549	549	2001, Government Code, must include a statement of the person's
550	550	right to judicial review of the order.
551	551	(o) The hearings officer may order the retail seller or the
552	552	prospective retail buyer, or both, to pay reasonable expenses
553	553	incurred by the commissioner in connection with obtaining a final
554	554	order under Subsection (l), including attorney's fees,
555	555	investigative costs, and witness fees.
556	556	(p) This section does not:
557	557	(1) apply to a bailment agreement under Section
558	558	353.003; or
559	559	(2) create a private right of action.
560	560	(q) Except as otherwise provided by this section, the
561	561	commissioner has exclusive jurisdiction to enforce this section.
562	562	Sec. 353.016. COMPUTATION OF TIME PRICE DIFFERENTIAL USING
563	563	TRUE DAILY EARNINGS METHOD. Under the true daily earnings method,
564	564	the earned time price differential is computed by multiplying the
565	565	daily rate of the time price differential by the number of days the
566	566	actual unpaid principal balance is outstanding. Under this method:
567	567	(1) a payment is credited at the time received, with a
568	568	payment received before the scheduled installment date resulting in
569	569	a greater reduction in the unpaid principal balance than otherwise
570	570	scheduled, and a payment received after the scheduled installment
571	571	date resulting in less of a reduction in the unpaid principal
572	572	balance than otherwise scheduled;
573	573	(2) a partial payment is applied first to time price
574	574	differential with any remainder applied to the unpaid principal
575	575	balance; and
576	576	(3) accrued but unpaid time price differential is not:
577	577	(A) added to the unpaid principal balance; or
578	578	(B) compounded.
579	579	[Sections 353.017-353.100 reserved for expansion]
580	580	SUBCHAPTER B. RETAIL INSTALLMENT CONTRACT
581	581	Sec. 353.101. RETAIL INSTALLMENT CONTRACT GENERAL
582	582	REQUIREMENTS. (a) A retail installment contract is required for
583	583	each retail installment transaction in which the retail buyer is
584	584	purchasing a commercial vehicle. A retail installment contract may
585	585	be more than one document.
586	586	(b) A retail installment contract must be:
587	587	(1) in writing;
588	588	(2) dated;
589	589	(3) signed by the retail buyer and retail seller; and
590	590	(4) completed as to all essential provisions before it
591	591	is signed by the retail buyer except as provided by Subsection (d).
592	592	(c) The printed part of a retail installment contract, other
593	593	than instructions for completion, must be in at least eight-point
594	594	type unless a different size of type is required under this
595	595	subchapter.
596	596	(d) If the commercial vehicle is not delivered when the
597	597	retail installment contract is executed, the following information
598	598	may be inserted after the contract is executed:
599	599	(1) the identifying numbers or marks of the vehicle or
600	600	similar information; and
601	601	(2) the due date of the first installment.
602	602	Sec. 353.102. CONTRACT CONDITIONED ON SUBSEQUENT
603	603	ASSIGNMENT PROHIBITED. (a) A retail installment contract may not
604	604	be conditioned on the subsequent assignment of the contract to a
605	605	holder.
606	606	(b) A provision in violation of this section is void. This
607	607	subsection does not affect the validity of other provisions of the
608	608	contract that may be given effect without the voided provision, and
609	609	to that extent those provisions are severable.
610	610	(c) This section does not create a private right of action.
611	611	(d) The commissioner has exclusive jurisdiction to enforce
612	612	this section.
613	613	Sec. 353.103. TIME PRICE DIFFERENTIAL FOR RETAIL
614	614	INSTALLMENT CONTRACT. (a) A retail installment contract may
615	615	provide for:
616	616	(1) any amount of time price differential permitted
617	617	under Section 353.104, 353.105, or 353.106; or
618	618	(2) any rate of time price differential not exceeding
619	619	a yield permitted under Section 353.104, 353.105, or 353.106.
620	620	(b) The time price differential may be computed using the:
621	621	(1) precomputed earnings method;
622	622	(2) scheduled installment earnings method; or
623	623	(3) true daily earnings method.
624	624	Sec. 353.104. TIME PRICE DIFFERENTIAL FOR CONTRACT WITH
625	625	EQUAL MONTHLY SUCCESSIVE PAYMENTS. (a) A retail installment
626	626	contract that is payable in substantially equal successive monthly
627	627	installments beginning one month after the date of the contract may
628	628	provide for a time price differential that does not exceed the
629	629	add-on charge provided by this section.
630	630	(b) The add-on charge is $7.50 per $100 per year on the
631	631	principal balance for a new commercial vehicle, other than a heavy
632	632	commercial vehicle, designated by the manufacturer by a model year
633	633	that is not earlier than the year in which the sale is made.
634	634	(c) The add-on charge is $10 per $100 per year on the
635	635	principal balance for:
636	636	(1) a new commercial vehicle not covered by Subsection
637	637	(b);
638	638	(2) a used commercial vehicle designated by the
639	639	manufacturer by a model year that is not more than two years before
640	640	the year in which the sale is made; or
641	641	(3) a new or used heavy commercial vehicle designated
642	642	by the manufacturer by a model year that is not more than two years
643	643	before the year in which the sale is made.
644	644	(d) The add-on charge is $12.50 per $100 per year on the
645	645	principal balance for a used commercial vehicle not covered by
646	646	Subsection (c) that is a commercial vehicle designated by the
647	647	manufacturer by a model year that is not more than four years before
648	648	the year in which the sale is made.
649	649	(e) For a used commercial vehicle not covered by Subsection
650	650	(c) or (d), the add-on charge is:
651	651	(1) $15 per $100 per year on the principal balance; or
652	652	(2) $18 per $100 per year on the principal balance if
653	653	the principal balance under the retail installment contract does
654	654	not exceed $300.
655	655	(f) The time price differential is computed on the original
656	656	principal balance under the retail installment contract from the
657	657	date of the contract until the maturity of the final installment,
658	658	notwithstanding that the balance is payable in installments.
659	659	(g) If the retail installment contract is payable for a
660	660	period that is shorter or longer than a year or is for an amount that
661	661	is less or greater than $100, the amount of the maximum time price
662	662	differential computed under this section is decreased or increased
663	663	proportionately.
664	664	(h) For the purpose of a computation under this section, 16
665	665	or more days of a month may be considered a full month.
666	666	Sec. 353.105. USE OF OPTIONAL CEILING. As an alternative to
667	667	the maximum rate or amount authorized for a time price differential
668	668	under Section 353.104 or 353.106, a retail installment contract may
669	669	provide for a rate or amount of time price differential that does
670	670	not exceed the rate or amount authorized by Chapter 303.
671	671	Sec. 353.106. TIME PRICE DIFFERENTIAL FOR OTHER CONTRACTS.
672	672	A retail installment contract that is payable other than in
673	673	substantially equal successive monthly installments or the first
674	674	installment of which is not payable one month from the date of the
675	675	contract may provide for a time price differential that does not
676	676	exceed an amount that, having due regard for the schedule of
677	677	payments, provides the same effective return as if the contract
678	678	were payable in substantially equal successive monthly
679	679	installments beginning one month from the date of the contract.
680	680	Sec. 353.107. CHARGE FOR DEFAULT IN PAYMENT OF INSTALLMENT.
681	681	(a) A retail installment contract may provide that if an
682	682	installment remains unpaid after the 10th day after the maturity of
683	683	the installment for a heavy commercial vehicle or after the 15th day
684	684	after the maturity of the installment for any other commercial
685	685	vehicle the holder may collect:
686	686	(1) a delinquency charge that does not exceed five
687	687	percent of the amount of the installment; or
688	688	(2) interest on the amount of the installment accruing
689	689	after the maturity of the installment and until the installment is
690	690	paid in full at a rate that does not exceed the maximum rate
691	691	authorized for the contract.
692	692	(b) A retail installment contract that provides for the true
693	693	daily earnings method or the scheduled installment earnings method
694	694	may provide for the delinquency charge authorized by Subsection
695	695	(a)(1), the interest authorized by Subsection (a)(2), or both.
696	696	(c) Only one delinquency charge under Subsection (a)(1) may
697	697	be collected on an installment under this section regardless of the
698	698	duration of the default.
699	699	Sec. 353.108. CHARGES FOR COLLECTING DEBT. A retail
700	700	installment contract may provide for the payment of:
701	701	(1) reasonable attorney's fees if the contract is
702	702	referred for collection to an attorney who is not a salaried
703	703	employee of the holder;
704	704	(2) court costs and disbursements; and
705	705	(3) reasonable out-of-pocket expenses incurred in
706	706	connection with the repossession or sequestration of the commercial
707	707	vehicle securing the payment of the contract or foreclosure of a
708	708	security interest in the vehicle, including the costs of storing,
709	709	reconditioning, and reselling the vehicle, subject to the standards
710	710	of good faith and commercial reasonableness set by Title 1,
711	711	Business & Commerce Code.
712	712	Sec. 353.109. ACCELERATION OF DEBT MATURITY. A retail
713	713	installment contract may not authorize the holder to accelerate the
714	714	maturity of all or a part of the amount owed under the contract
715	715	unless:
716	716	(1) the retail buyer is in default in the performance
717	717	of any of the buyer's obligations;
718	718	(2) the holder believes in good faith that the
719	719	prospect of the buyer's payment or performance is impaired; or
720	720	(3) the retail buyer or an affiliate of the retail
721	721	buyer is in default in its obligations under another financing
722	722	agreement or leasing agreement held by the same holder or an
723	723	affiliate of the holder.
724	724	Sec. 353.110. DELIVERY OF COPY OF CONTRACT. A retail seller
725	725	shall:
726	726	(1) deliver to the retail buyer a copy of the retail
727	727	installment contract as accepted by the retail seller; or
728	728	(2) mail to the retail buyer at the address shown on
729	729	the retail installment contract a copy of the retail installment
730	730	contract as accepted by the retail seller.
731	731	Sec. 353.111. BUYER'S RIGHT TO RESCIND CONTRACT. Until the
732	732	retail seller complies with Section 353.110, a retail buyer who has
733	733	not received delivery of the commercial vehicle is entitled to:
734	734	(1) rescind the contract;
735	735	(2) receive a refund of all payments made under or in
736	736	contemplation of the contract; and
737	737	(3) receive the return of all goods traded in to the
738	738	retail seller under or in contemplation of the contract or, if those
739	739	goods cannot be returned, to receive the value of those goods.
740	740	Sec. 353.112. BUYER'S ACKNOWLEDGMENT OF DELIVERY OF
741	741	CONTRACT COPY. (a) Any retail buyer's acknowledgment of delivery
742	742	of a copy of the retail installment contract must:
743	743	(1) be in at least 10-point type that is boldfaced,
744	744	capitalized, or underlined or otherwise conspicuously set out from
745	745	the surrounding written material; and
746	746	(2) appear directly above the buyer's signature.
747	747	(b) Any retail buyer's acknowledgment conforming to this
748	748	section of delivery of a copy of the retail installment contract is,
749	749	in an action or proceeding by or against a holder of the contract
750	750	who was without knowledge to the contrary when the holder purchased
751	751	it, conclusive proof:
752	752	(1) that the copy was delivered to the buyer;
753	753	(2) that the contract did not contain a blank space
754	754	that was required to have been completed under this chapter when the
755	755	contract was signed by the buyer; and
756	756	(3) of compliance with Sections 353.011, 353.101,
757	757	353.205, 353.403, 353.404, and 353.405.
758	758	Sec. 353.113. AMENDMENT OF RETAIL INSTALLMENT CONTRACT. On
759	759	request by a retail buyer, the holder may agree to one or more
760	760	amendments to the retail installment contract to:
761	761	(1) extend or defer the scheduled due date of all or a
762	762	part of one or more installments; or
763	763	(2) renew, restate, or reschedule the unpaid balance
764	764	under the contract.
765	765	Sec. 353.114. CHARGES FOR DEFERRING INSTALLMENT. (a) If a
766	766	retail installment contract is amended to defer all or a part of one
767	767	or more installments for not longer than three months, the holder
768	768	may collect from the retail buyer:
769	769	(1) an amount computed on the amount deferred for the
770	770	period of deferment at a rate that does not exceed the effective
771	771	return for time price differential permitted for a monthly payment
772	772	retail installment contract; and
773	773	(2) the amount of the additional cost to the holder
774	774	for:
775	775	(A) premiums for continuing in force any
776	776	insurance coverages provided for by the contract; and
777	777	(B) any additional necessary official fees.
778	778	(b) The minimum charge under Subsection (a)(1) is $1.
779	779	Sec. 353.115. CHARGE FOR OTHER AMENDMENT. (a) If the
780	780	unpaid balance of a retail installment contract is extended,
781	781	renewed, restated, or rescheduled under this subchapter and Section
782	782	353.114 does not apply, the holder may collect an amount computed on
783	783	the principal balance of the amended contract for the term of the
784	784	amended contract at the time price differential for a retail
785	785	installment contract that is applicable after reclassifying the
786	786	commercial vehicle by its model year at the time of the amendment.
787	787	(b) The principal balance of the amended contract is
788	788	computed by:
789	789	(1) adding:
790	790	(A) the unpaid balance as of the date of
791	791	amendment;
792	792	(B) the cost of any insurance incidental to the
793	793	amendment;
794	794	(C) the amount of each additional necessary
795	795	official fee; and
796	796	(D) the amount of each accrued delinquency or
797	797	collection charge; and
798	798	(2) if the time price differential was computed using
799	799	the precomputed earnings method or the scheduled installment
800	800	earnings method, subtracting from the total computed under
801	801	Subdivision (1) an amount equal to the prepayment refund credit
802	802	required by Section 353.120 or 353.121, as applicable.
803	803	(c) Subsection (b)(2) does not apply to a retail installment
804	804	contract in which the time price differential is computed using the
805	805	true daily earnings method.
806	806	(d) The provisions of this chapter relating to acquisition
807	807	costs under the refund schedule under Section 353.120 do not apply
808	808	in computing the principal balance of the amended contract.
809	809	Sec. 353.116. CONFIRMATION OF AMENDMENT. An amendment to a
810	810	retail installment contract must be confirmed in a writing signed
811	811	by the retail buyer. The holder shall:
812	812	(1) deliver a copy of the confirmation to the buyer; or
813	813	(2) mail a copy of the confirmation to the buyer at the
814	814	buyer's most recent address shown on the records of the holder.
815	815	Sec. 353.117. CONTRACT AFTER AMENDMENT. After amendment
816	816	the retail installment contract is the original contract and each
817	817	amendment to the original contract.
818	818	Sec. 353.118. PREPAYMENT OF CONTRACT. A retail buyer may
819	819	prepay a retail installment contract in full at any time before
820	820	maturity. This section prevails over a conflicting provision of the
821	821	contract.
822	822	Sec. 353.119. REFUND CREDIT ON PREPAYMENT. (a) This
823	823	section does not apply to a retail installment contract in which the
824	824	time price differential is computed using the true daily earnings
825	825	method.
826	826	(b) If a retail buyer prepays a retail installment contract
827	827	in full or if the holder of the contract demands payment of the
828	828	unpaid balance of the contract in full before the contract's final
829	829	installment is due and the time price differential is computed
830	830	using the precomputed earnings method or the scheduled installment
831	831	earnings method, the buyer is entitled to receive a refund credit as
832	832	provided by Section 353.120 or 353.121, as applicable.
833	833	Sec. 353.120. AMOUNT OF REFUND CREDIT FOR MONTHLY
834	834	INSTALLMENT CONTRACT. (a) This section:
835	835	(1) applies only to a refund credit on the prepayment
836	836	of a retail installment contract that is payable in substantially
837	837	equal successive monthly installments beginning one month after the
838	838	date of the contract; and
839	839	(2) does not apply to a retail installment contract in
840	840	which the time price differential is computed using the true daily
841	841	earnings method or the scheduled installment earnings method.
842	842	(b) On a contract for a commercial vehicle other than a
843	843	heavy commercial vehicle the minimum amount of the refund credit is
844	844	computed by:
845	845	(1) subtracting an acquisition cost of $25 from the
846	846	original time price differential; and
847	847	(2) multiplying the amount computed under Subdivision
848	848	(1) by the percentage of refund computed under Subsection (d).
849	849	(c) On a contract for a heavy commercial vehicle the minimum
850	850	amount of the refund credit is computed by:
851	851	(1) multiplying the amount of the original time price
852	852	differential by the percentage of refund computed under Subsection
853	853	(d); and
854	854	(2) subtracting an acquisition cost of $150 from the
855	855	amount computed under Subdivision (1).
856	856	(d) The percentage of refund is computed by:
857	857	(1) computing the sum of all of the monthly balances
858	858	under the contract's schedule of payments; and
859	859	(2) dividing the amount computed under Subdivision (1)
860	860	into the sum of the unpaid monthly balances under the contract's
861	861	schedule of payments beginning:
862	862	(A) on the first day, after the date of the
863	863	prepayment or demand for payment in full, that is the date of a
864	864	month that corresponds to the date of the month that the first
865	865	installment is due under the contract; or
866	866	(B) if the prepayment or demand for payment in
867	867	full is made before the first installment date under the contract,
868	868	one month after the next monthly anniversary date of the contract
869	869	occurring after the prepayment or demand.
870	870	(e) A refund credit is not required if the amount of the
871	871	refund credit is less than $1.
872	872	Sec. 353.121. REFUND ON CONTRACTS USING SCHEDULED
873	873	INSTALLMENT EARNINGS METHOD. (a) This section:
874	874	(1) applies to a retail installment contract:
875	875	(A) that includes precomputed time price
876	876	differential; and
877	877	(B) to which Section 353.120 does not apply; and
878	878	(2) does not apply to a retail installment contract in
879	879	which the time price differential is computed using the true daily
880	880	earnings method.
881	881	(b) If a retail installment contract is prepaid in full or
882	882	if the holder demands payment in full of the unpaid balance before
883	883	final maturity of the contract, the holder earns time price
884	884	differential for the period beginning on the date of the contract
885	885	and ending on the date of the earlier of the prepayment or demand,
886	886	in an amount that does not exceed the amount allowed by this
887	887	section.
888	888	(c) If prepayment in full or demand for payment in full
889	889	occurs during an installment period, the holder may retain, in
890	890	addition to time price differential that accrued during any elapsed
891	891	installment periods, an amount computed by:
892	892	(1) multiplying the simple annual rate under the
893	893	contract by the unpaid principal balance of the contract determined
894	894	according to the schedule of payments to be outstanding on the
895	895	preceding installment due date;
896	896	(2) dividing 365 into the product computed under
897	897	Subdivision (1); and
898	898	(3) multiplying the number of days in the period,
899	899	beginning on the day after the installment due date and ending on
900	900	the date of the earlier of the prepayment or demand, by the result
901	901	obtained under Subdivision (2).
902	902	(d) In addition to the earned time price differential
903	903	computed under this section, the holder may also earn a $150
904	904	acquisition fee for a heavy commercial vehicle, or a $25
905	905	acquisition fee for other commercial vehicles, if the sum of the
906	906	earned time price differential and the acquisition fee does not
907	907	exceed the time price differential disclosed in the contract.
908	908	(e) The holder shall refund or credit, as applicable, to the
909	909	retail buyer the amount computed by subtracting the total amount
910	910	earned or retained under Subsections (b), (c), and (d) from the
911	911	total amount of time price differential contracted for and
912	912	precomputed in the contract.
913	913	Sec. 353.122. REINSTATEMENT OF CONTRACT AFTER DEMAND FOR
914	914	PAYMENT. After a demand for payment in full under a retail
915	915	installment contract, the retail buyer and holder of the contract
916	916	may:
917	917	(1) agree to reinstate the contract; and
918	918	(2) amend the contract as provided by Section 353.113.
919	919	[Sections 353.123-353.200 reserved for expansion]
920	920	SUBCHAPTER C. INSURANCE
921	921	Sec. 353.201. PROPERTY INSURANCE. (a) A holder may require
922	922	a retail buyer to insure the commercial vehicle purchased under a
923	923	retail installment transaction and accessories and related goods
924	924	subject to the holder's security interest.
925	925	(b) The holder may offer to provide insurance on a
926	926	commercial vehicle purchased under a retail installment
927	927	transaction and accessories and related goods subject to the
928	928	holder's security interest, regardless of whether the holder
929	929	requires a retail buyer to insure the commercial vehicle.
930	930	(c) The insurance required by the holder, and the premiums
931	931	or charges for any insurance that is provided by the holder, must
932	932	bear a reasonable relationship to:
933	933	(1) the amount, term, and conditions of the retail
934	934	installment contract; and
935	935	(2) the existing hazards or risk of loss, damage, or
936	936	destruction.
937	937	(d) Any insurance under this section may not:
938	938	(1) cover unusual or exceptional risks; or
939	939	(2) provide coverage not ordinarily included in
940	940	policies issued to the public or for commercial purposes.
941	941	(e) The holder may include the cost of the insurance as a
942	942	separate charge in the contract.
943	943	Sec. 353.202. CREDIT LIFE AND CREDIT HEALTH AND ACCIDENT
944	944	INSURANCE. (a) A holder may require a retail buyer to provide
945	945	credit life insurance and credit health and accident insurance.
946	946	(b) The holder may offer to provide credit life insurance
947	947	and credit health and accident insurance, regardless of whether the
948	948	holder requires a retail buyer to provide the insurance under
949	949	Subsection (a).
950	950	(c) A retail seller may offer involuntary unemployment
951	951	insurance to the buyer at the time the contract is negotiated or
952	952	executed.
953	953	(d) A holder may include the cost of insurance provided
954	954	under this section, and a policy or agent fee charged in connection
955	955	with insurance provided under Subsection (b) or (c), as a separate
956	956	charge in the contract.
957	957	Sec. 353.203. MAXIMUM AMOUNT OF CREDIT LIFE AND CREDIT
958	958	HEALTH AND ACCIDENT COVERAGE. (a) At any time the total amount of
959	959	the policies of credit life insurance in force on one retail buyer
960	960	on one retail installment contract may not exceed:
961	961	(1) the total amount repayable under the contract; and
962	962	(2) the greater of the scheduled or actual amount of
963	963	unpaid indebtedness if the indebtedness is repayable in
964	964	substantially equal installments.
965	965	(b) At any time the total amount of the policies of credit
966	966	health and accident insurance in force on one retail buyer on one
967	967	retail installment contract may not exceed the total amount payable
968	968	under the contract, and the amount of each periodic indemnity
969	969	payment may not exceed the scheduled periodic payment on the
970	970	indebtedness.
971	971	Sec. 353.204. INSURANCE STATEMENT. (a) If insurance is
972	972	required in connection with a retail installment contract, the
973	973	holder shall give to the retail buyer a written statement that
974	974	clearly and conspicuously states that:
975	975	(1) insurance is required in connection with the
976	976	contract; and
977	977	(2) the buyer as an option may furnish the required
978	978	insurance through:
979	979	(A) an existing policy of insurance owned or
980	980	controlled by the buyer; or
981	981	(B) an insurance policy obtained through an
982	982	insurance company authorized to do business in this state.
983	983	(b) A statement under Subsection (a) may be provided with or
984	984	as part of the retail installment contract or separately.
985	985	Sec. 353.205. STATEMENT IF LIABILITY INSURANCE NOT INCLUDED
986	986	IN CONTRACT. If liability insurance coverage for bodily injury and
987	987	property damage caused to others is not included in a retail
988	988	installment contract, the retail installment contract or a separate
989	989	writing must contain, in at least 10-point type that is boldfaced,
990	990	capitalized, underlined, or otherwise conspicuously set out from
991	991	the surrounding written material, a specific statement that
992	992	liability insurance coverage for bodily injury and property damage
993	993	caused to others is not included.
994	994	Sec. 353.206. BUYER'S FAILURE TO PROVIDE EVIDENCE OF
995	995	INSURANCE. (a) If a retail buyer fails to present to the holder
996	996	reasonable evidence that the buyer has obtained or maintained a
997	997	coverage required by the retail installment contract, the holder
998	998	may:
999	999	(1) obtain substitute insurance coverage that is
1000	1000	substantially equal to or more limited than the coverage required;
1001	1001	and
1002	1002	(2) add the amount of the premium advanced for the
1003	1003	substitute insurance to the unpaid balance of the contract.
1004	1004	(b) Substitute insurance coverage under Subsection (a)(1):
1005	1005	(1) may at the holder's option be limited to coverage
1006	1006	only of the interest of the holder or the interest of the holder and
1007	1007	the buyer; and
1008	1008	(2) must be written at lawful rates in accordance with
1009	1009	the Insurance Code by a company authorized to do business in this
1010	1010	state.
1011	1011	(c) If substitute insurance is obtained by the holder under
1012	1012	Subsection (a), the amendment adding the premium or rescheduling
1013	1013	the contract is not required to be signed by the retail buyer. The
1014	1014	holder shall deliver to the buyer or send to the buyer's most recent
1015	1015	address shown on the records of the holder specific written notice
1016	1016	that the holder has obtained substitute insurance.
1017	1017	Sec. 353.207. CHARGES FOR OTHER INSURANCE AND FORMS OF
1018	1018	PROTECTION INCLUDED IN RETAIL INSTALLMENT CONTRACT. (a) A retail
1019	1019	installment contract may include as a separate charge an amount for
1020	1020	insurance coverage that is:
1021	1021	(1) for a risk of loss or liability reasonably related
1022	1022	to:
1023	1023	(A) the commercial vehicle;
1024	1024	(B) the use of the commercial vehicle; or
1025	1025	(C) goods or services that:
1026	1026	(i) are related to the commercial vehicle;
1027	1027	and
1028	1028	(ii) may ordinarily be insured with a
1029	1029	commercial vehicle;
1030	1030	(2) written on policies or endorsement forms
1031	1031	prescribed or approved by the commissioner of insurance; and
1032	1032	(3) ordinarily available in policies or endorsements
1033	1033	offered to the public or for commercial purposes.
1034	1034	(b) A retail installment contract may include as a separate
1035	1035	charge an amount for:
1036	1036	(1) motor vehicle property damage or bodily injury
1037	1037	liability insurance;
1038	1038	(2) mechanical breakdown insurance;
1039	1039	(3) participation in a motor vehicle theft protection
1040	1040	plan;
1041	1041	(4) insurance to pay all or part of the amount computed
1042	1042	by subtracting the proceeds of the retail buyer's basic collision
1043	1043	policy on the commercial vehicle from the amount owed on the vehicle
1044	1044	in the event of a total loss or theft of the vehicle;
1045	1045	(5) a warranty or service contract relating to the
1046	1046	commercial vehicle;
1047	1047	(6) an identity recovery service contract defined by
1048	1048	Section 1306.003, Occupations Code; or
1049	1049	(7) a debt cancellation agreement.
1050	1050	(c) Notwithstanding any other law, service contracts and
1051	1051	debt cancellation agreements sold by a retail seller of a
1052	1052	commercial vehicle to a retail buyer are not subject to Chapter 101
1053	1053	or 226, Insurance Code.
1054	1054	(d) In addition to the charges for insurance coverage
1055	1055	permitted under Subsection (a) or (b), a retail installment
1056	1056	contract may include a charge for insurance coverage relating to:
1057	1057	(1) the commercial vehicle;
1058	1058	(2) the use of the commercial vehicle; or
1059	1059	(3) the retail installment contract.
1060	1060	(e) Insurance coverage under Subsection (d) may be provided
1061	1061	only by:
1062	1062	(1) an insurer authorized under the Insurance Code to
1063	1063	engage in the business of insurance in this state; or
1064	1064	(2) if permitted under the Insurance Code, a surplus
1065	1065	lines insurer eligible to provide the insurance under Chapter 981,
1066	1066	Insurance Code.
1067	1067	(f) A retail installment contract must set forth the amount
1068	1068	of each charge for insurance coverage under Subsection (d) and the
1069	1069	type of the coverage provided for that charge.
1070	1070	Sec. 353.208. HOLDER'S DUTY IF INSURANCE IS ADJUSTED OR
1071	1071	TERMINATED. (a) If insurance for which a charge is included in or
1072	1072	added to a retail installment contract is canceled, adjusted, or
1073	1073	terminated, the holder shall, at the holder's option:
1074	1074	(1) apply the amount of the refund for unearned
1075	1075	insurance premiums received by the holder to replace required
1076	1076	insurance coverage; or
1077	1077	(2) credit the refund to the final maturing
1078	1078	installments of the retail installment contract.
1079	1079	(b) If the amount to be applied or credited under Subsection
1080	1080	(a) is more than the amount unpaid on the retail installment
1081	1081	contract, the holder shall refund to the retail buyer the
1082	1082	difference between those amounts.
1083	1083	(c) A cash refund is not required under this section if the
1084	1084	amount of the refund is less than $1.
1085	1085	Sec. 353.209. GAIN OR ADVANTAGE FROM INSURANCE NOT
1086	1086	ADDITIONAL CHARGE. Any gain or advantage to the holder or the
1087	1087	holder's employee, officer, director, agent, general agent,
1088	1088	affiliate, or associate from insurance or the provision or sale of
1089	1089	insurance under this subchapter is not an additional charge or
1090	1090	additional time price differential in connection with a retail
1091	1091	installment contract except as specifically provided by this
1092	1092	chapter.
1093	1093	Sec. 353.210. ADDING TO RETAIL INSTALLMENT CONTRACT
1094	1094	PREMIUMS FOR INSURANCE ACQUIRED AFTER TRANSACTION. (a) A retail
1095	1095	buyer and holder may agree to add to the unpaid balance of a retail
1096	1096	installment contract premiums for insurance policies obtained
1097	1097	after the date of the retail installment transaction for coverages
1098	1098	of the types allowed under Sections 353.201, 353.202, and 353.207,
1099	1099	including premiums for the renewal of a policy included in the
1100	1100	contract.
1101	1101	(b) A policy of insurance described by Subsection (a) must
1102	1102	comply with the requirements of Sections 353.201, 353.202, 353.203,
1103	1103	and 353.207, as applicable.
1104	1104	Sec. 353.211. EFFECT OF ADDING PREMIUM TO CONTRACT. If a
1105	1105	premium is added to the unpaid balance of a retail installment
1106	1106	contract under Section 353.206 or 353.210, the rate applicable to
1107	1107	the time price differential agreed to in the retail installment
1108	1108	contract remains in effect and shall be applied to the new unpaid
1109	1109	balance, or the contract may be rescheduled in accordance with
1110	1110	Sections 353.114 and 353.115, without reclassifying the commercial
1111	1111	vehicle by its year model at the time of the amendment.
1112	1112	Sec. 353.212. FINANCING ENTITY MAY NOT REQUIRE INSURANCE
1113	1113	FROM PARTICULAR SOURCE. If a retail installment contract presented
1114	1114	to a financing entity for acceptance includes any insurance
1115	1115	coverage, the financing entity may not directly or indirectly
1116	1116	require, as a condition of its agreement to finance the commercial
1117	1117	vehicle, that the retail buyer purchase the insurance coverage from
1118	1118	a particular source.
1119	1119	[Sections 353.213-353.300 reserved for expansion]
1120	1120	SUBCHAPTER D. ACQUISITION OF CONTRACT OR BALANCE
1121	1121	Sec. 353.301. AUTHORITY TO ACQUIRE. A person may acquire a
1122	1122	retail installment contract or an outstanding balance under a
1123	1123	contract from another person on the terms, including the price, to
1124	1124	which they agree. Notwithstanding any other law of this state, a
1125	1125	person acquiring or assigning a retail installment contract, or any
1126	1126	balance under a contract, does not have a duty to disclose to any
1127	1127	other person the terms on which a contract or balance under a
1128	1128	contract is acquired or assigned, including the consideration for
1129	1129	the acquisition or assignment and any discount or difference
1130	1130	between the rates, charges, or balance under the contract and the
1131	1131	consideration rates, charges, or balance acquired or assigned, as
1132	1132	applicable.
1133	1133	Sec. 353.302. LACK OF NOTICE DOES NOT AFFECT VALIDITY AS TO
1134	1134	CERTAIN CREDITORS. Notice to a retail buyer of an assignment or
1135	1135	negotiation of a retail installment contract or an outstanding
1136	1136	balance under the contract or a requirement that the retail seller
1137	1137	be deprived of dominion over payments on a retail installment
1138	1138	contract or over the commercial vehicle if returned to or
1139	1139	repossessed by the retail seller is not necessary for a written
1140	1140	assignment or negotiation of the contract or balance to be valid as
1141	1141	against a creditor, subsequent purchaser, pledgee, mortgagee, or
1142	1142	lien claimant of the retail seller.
1143	1143	Sec. 353.303. PAYMENT BY BUYER. Unless a retail buyer has
1144	1144	notice of the assignment or negotiation of the buyer's retail
1145	1145	installment contract or an outstanding balance under the contract,
1146	1146	a payment by the buyer to the most recent holder known to the buyer
1147	1147	is binding on all subsequent holders.
1148	1148	[Sections 353.304-353.400 reserved for expansion]
1149	1149	SUBCHAPTER E. HOLDER'S RIGHTS, DUTIES, AND LIMITATIONS
1150	1150	Sec. 353.401. SELLER'S PROMISE TO PAY OR TENDER OF CASH TO
1151	1151	BUYER AS PART OF TRANSACTION. A retail seller may not promise to
1152	1152	pay, pay, or otherwise tender cash to a retail buyer as a part of a
1153	1153	transaction under this chapter unless specifically authorized by
1154	1154	this chapter.
1155	1155	Sec. 353.402. SELLER'S ACTION FOR INCENTIVE PROGRAM OR TO
1156	1156	PAY FOR BUYER'S MOTOR VEHICLE. (a) A retail seller may pay,
1157	1157	promise to pay, or tender cash or another thing of value to the
1158	1158	manufacturer, distributor, or retail buyer of the product if the
1159	1159	payment, promise, or tender is made in order to participate in a
1160	1160	financial incentive program offered by the manufacturer or
1161	1161	distributor of the vehicle to the buyer.
1162	1162	(b) A retail seller, in connection with a retail installment
1163	1163	transaction, may:
1164	1164	(1) advance money to retire:
1165	1165	(A) an amount owed against a motor vehicle used
1166	1166	as a trade-in or a motor vehicle owned by the buyer that has been
1167	1167	declared a total loss by the buyer's insurer; or
1168	1168	(B) the retail buyer's outstanding obligation
1169	1169	under a motor vehicle lease contract, a credit transaction for the
1170	1170	purchase of a motor vehicle, or another retail installment
1171	1171	transaction; and
1172	1172	(2) finance repayment of that money in a retail
1173	1173	installment contract.
1174	1174	(c) A retail seller may pay in cash to the retail buyer any
1175	1175	portion of the net cash value of a motor vehicle owned by the buyer
1176	1176	and used as a trade-in in a transaction involving the sale of a
1177	1177	commercial vehicle. In this subsection, "net cash value" means the
1178	1178	cash value of a motor vehicle after payment of all amounts secured
1179	1179	by the motor vehicle.
1180	1180	Sec. 353.403. STATEMENT OF PAYMENTS AND AMOUNT DUE UNDER
1181	1181	CONTRACT. (a) On written request of a retail buyer, the holder of a
1182	1182	retail installment contract shall give or send to the buyer a
1183	1183	written statement of the dates and amounts of payments and the total
1184	1184	amount unpaid under the contract.
1185	1185	(b) A retail buyer is entitled to one statement during a
1186	1186	six-month period without charge. The charge for each additional
1187	1187	requested statement may not exceed $1.
1188	1188	Sec. 353.404. RECEIPT FOR CASH PAYMENT. A holder of a
1189	1189	retail installment contract shall give the retail buyer a written
1190	1190	receipt for each cash payment.
1191	1191	Sec. 353.405. OUTSTANDING BALANCE INFORMATION; PAYMENT IN
1192	1192	FULL. (a) The holder of a retail installment contract who gives
1193	1193	the retail buyer or the buyer's designee outstanding balance
1194	1194	information relating to the contract is bound by that information
1195	1195	and shall honor that information for a reasonable time.
1196	1196	(b) If the retail buyer or the buyer's designee tenders to
1197	1197	the holder as payment in full an amount derived from that
1198	1198	outstanding balance information, the holder shall:
1199	1199	(1) accept the amount as payment in full; and
1200	1200	(2) release the holder's lien against the commercial
1201	1201	vehicle within a reasonable time not later than the 10th day after
1202	1202	the date on which the amount is tendered.
1203	1203	(c) A retail seller must pay in full the outstanding balance
1204	1204	of a vehicle traded in to the retail seller as part of the retail
1205	1205	installment transaction not later than the 25th day after the date
1206	1206	that:
1207	1207	(1) the retail installment contract is signed by the
1208	1208	retail buyer and the retail buyer receives delivery of the
1209	1209	commercial vehicle; and
1210	1210	(2) the retail seller receives delivery of the motor
1211	1211	vehicle traded in and the necessary and appropriate documents to
1212	1212	transfer title from the buyer.
1213	1213	Sec. 353.406. LIABILITY RELATING TO OUTSTANDING BALANCE
1214	1214	INFORMATION. A holder who violates Section 353.405 is liable to the
1215	1215	retail buyer or the buyer's designee in an amount computed by
1216	1216	adding:
1217	1217	(1) three times the difference between the amount
1218	1218	tendered and the amount sought by the holder at the time of tender;
1219	1219	(2) interest;
1220	1220	(3) reasonable attorney's fees; and
1221	1221	(4) costs.
1222	1222	Sec. 353.407. PROHIBITION ON POWER OF ATTORNEY TO CONFESS
1223	1223	JUDGMENT OR ASSIGNMENT OF WAGES. A retail installment contract may
1224	1224	not contain:
1225	1225	(1) a power of attorney to confess judgment in this
1226	1226	state; or
1227	1227	(2) an assignment of wages.
1228	1228	Sec. 353.408. PROHIBITION ON CERTAIN ACTS OF REPOSSESSION.
1229	1229	A retail installment contract may not:
1230	1230	(1) authorize the holder or a person acting on the
1231	1231	holder's behalf to:
1232	1232	(A) enter the retail buyer's premises in
1233	1233	violation of Chapter 9, Business & Commerce Code; or
1234	1234	(B) commit a breach of the peace in the
1235	1235	repossession of the commercial vehicle; or
1236	1236	(2) contain, or provide for the execution of, a power
1237	1237	of attorney by the retail buyer appointing, as the buyer's agent in
1238	1238	the repossession of the vehicle, the holder or a person acting on
1239	1239	the holder's behalf.
1240	1240	Sec. 353.409. BUYER'S WAIVER. (a) A retail installment
1241	1241	contract may not:
1242	1242	(1) provide for a waiver of the retail buyer's rights
1243	1243	of action against the holder or a person acting on the holder's
1244	1244	behalf for an illegal act committed in:
1245	1245	(A) the collection of payments under the
1246	1246	contract; or
1247	1247	(B) the repossession of the commercial vehicle;
1248	1248	or
1249	1249	(2) provide that the retail buyer agrees not to assert
1250	1250	against the holder a claim or defense arising out of the sale.
1251	1251	(b) An act or agreement of the retail buyer before or at the
1252	1252	time of the making of a retail installment contract or a purchase
1253	1253	under the contract does not waive any provision of this chapter.
1254	1254	Sec. 353.410. TRANSFER OF EQUITY. (a) With the written
1255	1255	consent of the holder, a retail buyer may transfer at any time the
1256	1256	buyer's equity in the commercial vehicle subject to the retail
1257	1257	installment contract to another person.
1258	1258	(b) The holder may charge for the transfer of equity an
1259	1259	amount that does not exceed:
1260	1260	(1) $25 for a commercial vehicle that is not a heavy
1261	1261	commercial vehicle; or
1262	1262	(2) $50 for a heavy commercial vehicle.
1263	1263	[Sections 353.411-353.500 reserved for expansion]
1264	1264	SUBCHAPTER F. LICENSING; ADMINISTRATION OF CHAPTER
1265	1265	Sec. 353.501. LICENSE REQUIRED. (a) A person may not act
1266	1266	as a holder under this chapter unless the person:
1267	1267	(1) is an authorized lender or a credit union; or
1268	1268	(2) holds a license issued under Chapter 348 or this
1269	1269	chapter.
1270	1270	(b) A person who is required to hold a license under this
1271	1271	chapter must ensure that each office at which retail installment
1272	1272	transactions are made, serviced, held, or collected under this
1273	1273	chapter is licensed or otherwise authorized to make, service, hold,
1274	1274	or collect retail installment transactions in accordance with this
1275	1275	chapter and rules implementing this chapter.
1276	1276	(c) A person may not use any device, subterfuge, or pretense
1277	1277	to evade the application of this section.
1278	1278	Sec. 353.502. APPLICATION REQUIREMENTS. (a) The
1279	1279	application for a license under this chapter must:
1280	1280	(1) be under oath;
1281	1281	(2) identify the applicant's principal parties in
1282	1282	interest; and
1283	1283	(3) contain other relevant information that the
1284	1284	commissioner requires.
1285	1285	(b) On the filing of a license application, the applicant
1286	1286	shall pay to the commissioner:
1287	1287	(1) an investigation fee not to exceed $200; and
1288	1288	(2) for the license's year of issuance, a license fee
1289	1289	in an amount determined as provided by Section 14.107.
1290	1290	Sec. 353.503. INVESTIGATION OF APPLICATION. On the filing
1291	1291	of an application and payment of the required fees, the
1292	1292	commissioner shall conduct an investigation to determine whether to
1293	1293	issue the license.
1294	1294	Sec. 353.504. APPROVAL OR DENIAL OF APPLICATION. (a) The
1295	1295	commissioner shall approve the application and issue to the
1296	1296	applicant a license under this chapter if the commissioner finds
1297	1297	that the financial responsibility, experience, character, and
1298	1298	general fitness of the applicant are sufficient to:
1299	1299	(1) command the confidence of the public; and
1300	1300	(2) warrant the belief that the business will be
1301	1301	operated lawfully and fairly, within the purposes of this chapter.
1302	1302	(b) If the commissioner does not find the eligibility
1303	1303	requirements of Subsection (a), the commissioner shall notify the
1304	1304	applicant.
1305	1305	(c) If an applicant requests a hearing on the application
1306	1306	not later than the 30th day after the date of notification under
1307	1307	Subsection (b), the applicant is entitled to a hearing not later
1308	1308	than the 60th day after the date of the request.
1309	1309	(d) The commissioner shall approve or deny the application
1310	1310	not later than the 60th day after the date of the filing of a
1311	1311	completed application with payment of the required fees, or if a
1312	1312	hearing is held, after the date of the completion of the hearing on
1313	1313	the application. The commissioner and the applicant may agree to a
1314	1314	later date in writing.
1315	1315	Sec. 353.505. DISPOSITION OF FEES ON DENIAL OF APPLICATION.
1316	1316	If the commissioner denies the application, the commissioner shall
1317	1317	retain the investigation fee and shall return to the applicant the
1318	1318	license fee submitted with the application.
1319	1319	Sec. 353.506. ANNUAL LICENSE FEE. Not later than December
1320	1320	1, a license holder shall pay to the commissioner for each license
1321	1321	held an annual fee for the year beginning the next January 1, in an
1322	1322	amount determined as provided by Section 14.107.
1323	1323	Sec. 353.507. EXPIRATION OF LICENSE ON FAILURE TO PAY
1324	1324	ANNUAL FEE. If the annual fee for a license is not paid before the
1325	1325	16th day after the date on which the written notice of delinquency
1326	1326	of payment has been given to the license holder, the license expires
1327	1327	on the later of:
1328	1328	(1) that day; or
1329	1329	(2) December 31 of the last year for which an annual
1330	1330	fee was paid.
1331	1331	Sec. 353.508. LICENSE SUSPENSION OR REVOCATION. After
1332	1332	notice and a hearing the commissioner may suspend or revoke a
1333	1333	license if the commissioner finds that:
1334	1334	(1) the license holder failed to pay the annual
1335	1335	license fee, an investigation fee, or another charge imposed by the
1336	1336	commissioner;
1337	1337	(2) the license holder, knowingly or without the
1338	1338	exercise of due care, violated this chapter or a rule adopted or
1339	1339	order issued under this chapter; or
1340	1340	(3) a fact or condition exists that, if it had existed
1341	1341	or had been known to exist at the time of the original application
1342	1342	for the license, clearly would have justified the commissioner's
1343	1343	denial of the application.
1344	1344	Sec. 353.509. REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
1345	1345	OF NEW LICENSE AFTER REVOCATION. The commissioner may reinstate a
1346	1346	suspended license or issue a new license on application to a person
1347	1347	whose license has been revoked if at the time of the reinstatement
1348	1348	or issuance no fact or condition exists that clearly would have
1349	1349	justified the commissioner's denial of an original application for
1350	1350	the license.
1351	1351	Sec. 353.510. SURRENDER OF LICENSE. A license holder may
1352	1352	surrender a license issued under this chapter by delivering to the
1353	1353	commissioner:
1354	1354	(1) the license; and
1355	1355	(2) a written notice of the license's surrender.
1356	1356	Sec. 353.511. EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
1357	1357	SURRENDER. (a) The suspension, revocation, or surrender of a
1358	1358	license issued under this chapter does not affect the obligation of
1359	1359	a contract between the license holder and a retail buyer entered
1360	1360	into before the suspension, revocation, or surrender.
1361	1361	(b) Surrender of a license does not affect the license
1362	1362	holder's civil or criminal liability for an act committed before
1363	1363	surrender.
1364	1364	Sec. 353.512. TRANSFER OR ASSIGNMENT OF LICENSE. A license
1365	1365	may be transferred or assigned only with the approval of the
1366	1366	commissioner.
1367	1367	Sec. 353.513. ADOPTION OF RULES. (a) The finance
1368	1368	commission may adopt rules to enforce this chapter.
1369	1369	(b) The commissioner shall recommend proposed rules to the
1370	1370	finance commission.
1371	1371	Sec. 353.514. GENERAL INVESTIGATION. To discover a
1372	1372	violation of this chapter or to obtain information required under
1373	1373	this chapter, the commissioner or the commissioner's
1374	1374	representative may investigate the records, including books,
1375	1375	accounts, papers, and correspondence, of a person, including a
1376	1376	license holder, who the commissioner has reasonable cause to
1377	1377	believe is violating this chapter, regardless of whether the person
1378	1378	claims to not be subject to this chapter.
1379	1379	Sec. 353.515. SHARING OF INFORMATION. To ensure consistent
1380	1380	enforcement of law and minimization of regulatory burdens, the
1381	1381	commissioner and the Texas Department of Motor Vehicles may share
1382	1382	information, including criminal history information, relating to a
1383	1383	person licensed under this chapter. Information otherwise
1384	1384	confidential remains confidential after it is shared under this
1385	1385	section.
1386	1386	SECTION 18. Section 411.095, Government Code, is amended to
1387	1387	read as follows:
1388	1388	Sec. 411.095. ACCESS TO CRIMINAL HISTORY RECORD
1389	1389	INFORMATION: CONSUMER CREDIT COMMISSIONER. The consumer credit
1390	1390	commissioner is entitled to obtain from the department criminal
1391	1391	history record information that relates to a person who is an
1392	1392	applicant for or holder of a license under Chapter 342, 347, 348,
1393	1393	351, 353, or 371, Finance Code.
1394	1394	SECTION 19. Section 1304.003(b), Occupations Code, is
1395	1395	amended to read as follows:
1396	1396	(b) A service contract may also provide for:
1397	1397	(1) incidental payment or indemnity under limited
1398	1398	circumstances, including towing, rental, and emergency road
1399	1399	service;
1400	1400	(2) the repair or replacement of a product for damage
1401	1401	resulting from a power surge or for accidental damage incurred in
1402	1402	handling the product; or
1403	1403	(3) identity recovery, as defined by Section 1306.002,
1404	1404	if the service contract is financed under Chapter 348 or 353,
1405	1405	Finance Code.
1406	1406	SECTION 20. Section 1306.003, Occupations Code, is amended
1407	1407	to read as follows:
1408	1408	Sec. 1306.003. IDENTITY RECOVERY SERVICE CONTRACT. In this
1409	1409	chapter, "identity recovery service contract" means an agreement:
1410	1410	(1) to provide identity recovery;
1411	1411	(2) that is entered into for a separately stated
1412	1412	consideration and for a specified term; and
1413	1413	(3) that is financed through a retail installment
1414	1414	contract under Chapter 348 or 353, Finance Code.
1415	1415	SECTION 21. Section 2305.007(b), Occupations Code, is
1416	1416	amended to read as follows:
1417	1417	(b) For the purposes of tracing or locating a stolen motor
1418	1418	vehicle on the premises of a person engaging in a business or
1419	1419	activity regulated under this chapter who is also licensed under
1420	1420	Chapter 348 or 353, Finance Code, only an officer of the Department
1421	1421	of Public Safety may at a reasonable time:
1422	1422	(1) enter the premises of the person's business; and
1423	1423	(2) inspect or copy any document, record, vehicle,
1424	1424	part, or other item regulated under:
1425	1425	(A) this chapter; or
1426	1426	(B) Chapter 348 or 353, Finance Code.
1427	1427	SECTION 22. Section 2306.003(c), Occupations Code, is
1428	1428	amended to read as follows:
1429	1429	(c) A vehicle protection product may also include identity
1430	1430	recovery, as defined by Section 1306.002, if the vehicle protection
1431	1431	product is financed under Chapter 348 or 353, Finance Code.
1432	1432	SECTION 23. Section 152.002(b), Tax Code, is amended to
1433	1433	read as follows:
1434	1434	(b) "Total consideration" does not include:
1435	1435	(1) a cash discount;
1436	1436	(2) a full cash or credit refund to a customer of the
1437	1437	sales price of a motor vehicle returned to the seller;
1438	1438	(3) the amount charged for labor or service rendered
1439	1439	in installing, applying, remodeling, or repairing the motor vehicle
1440	1440	sold;
1441	1441	(4) a financing, carrying, or service charge or
1442	1442	interest on credit extended on a motor vehicle sold under a
1443	1443	conditional sale or other deferred payment contract;
1444	1444	(5) the value of a motor vehicle taken by a seller as
1445	1445	all or a part of the consideration for sale of another motor
1446	1446	vehicle, including any cash payment to the buyer under Section
1447	1447	348.404 or 353.402, Finance Code;
1448	1448	(6) a charge for transportation of the motor vehicle
1449	1449	after a sale;
1450	1450	(7) motor vehicle inventory tax; or
1451	1451	(8) an amount made available to the customer under
1452	1452	Subchapter G, Chapter 382, Health and Safety Code.
1453	1453	SECTION 24. Section 501.115(a), Transportation Code, is
1454	1454	amended to read as follows:
1455	1455	(a) When a debt or claim secured by a lien has been
1456	1456	satisfied, the lienholder shall, within a reasonable time not to
1457	1457	exceed the maximum time allowed by Section 348.408 or 353.405(b),
1458	1458	Finance Code, as applicable, execute and deliver to the owner, or
1459	1459	the owner's designee, a discharge of the lien on a form prescribed
1460	1460	by the department.
1461	1461	SECTION 25. Section 26.342(7), Water Code, is amended to
1462	1462	read as follows:
1463	1463	(7) "Lender" means:
1464	1464	(A) a state or national bank;
1465	1465	(B) a state or federal savings and loan
1466	1466	association or savings bank;
1467	1467	(C) a credit union;
1468	1468	(D) a state or federal agency that customarily
1469	1469	provides financing; or
1470	1470	(E) an entity that is registered with the Office
1471	1471	of Consumer Credit Commissioner pursuant to Chapter 348 or 353,
1472	1472	Finance Code, if the entity is regularly engaged in the business of
1473	1473	extending credit and if extending credit represents the majority of
1474	1474	the entity's total business activity.
1475	1475	SECTION 26. The following provisions of the Finance Code
1476	1476	are repealed:
1477	1477	(1) Section 348.007(a-2), as added by Chapter 238
1478	1478	(S.B. 1965), Acts of the 81st Legislature, Regular Session, 2009;
1479	1479	(2) Section 348.007(a-2), as added by Chapter 676
1480	1480	(H.B. 2438), Acts of the 81st Legislature, Regular Session, 2009;
1481	1481	and
1482	1482	(3) Sections 348.0051, 348.006(j), 348.120(c), and
1483	1483	348.208(d), (e), and (f).
1484	1484	SECTION 27. This Act takes effect September 1, 2011.
1485	1485	* * * * *